before the tragedy in boston, there was a market decline because of the stunning events in boston, massachusetts. why was it going down before that though? frankly, it was a self-fulfilling day, and the best encapsulated by the following wisdom, everyone else is selling so don't we have to sell, too? with the dow jones slipping, and the s&p 2.3%, and nasdaq with the worst day in a long time, what was going on with the stock market? why weak from to get-go? now, i kept my ear to the ground all day and frankly, i want to tell the truth out here, i could not find a single truly cogent or plausible reason that the market got hit as hard as it did. china with a down tic in growth and we know that from the under 8% number they reported last night. that is disappointing, but nothing alone can explain that. as for chinese weakness, i blame the usual suspect which is europe, because you know, europe is china's biggest trading

partner and when your biggest trading partner has a no-growth philosophy and paralyzing its own economy, you are not doing a lot of business with a partner, and the proximate cause for the weakness here in the united states was the shellacking in gold and the worst decline since 1980, and what we look at the etf falling 8% in a single day and now gold futures tumbling 15% in two days, and that is remarkable. and what caused that go down hideously? and gold and wheat causing all of the commodities to plummet, and oil did drop a little bit more than $2 after being down badly last week, i could say, yes, to that. i could say, yes, gold is that powerful and crush all sorts of assets in the declining wake, but it isn't. i could easily tell you, of course, that the slowing in china caused gold, copper, aluminum and other stocks the decline. it didn't. it would be an excuse that would fit the picture, but mystify you

even more and really be nothing more than attempt by me to put the irrational in the rational box and then wrap a bow on it. think about it. china is terrible all year and nothing new here except for late built of a down tick. now when you don't know why the market went down hard on a given day with particular parts of it like the commodities and the commodity stocks declining dramatically, you know what you need? you need a playbook and i happen to have the playbook and honed by the many days that have stumped me in 31 years of investing and forged in frustration and red inning and may i add a playbook that has unfortunately seen its share of geopolitical and human tragedies. it is a playbook in three parts and before i tell you how to make hay in the market and believe me there is a way, and there is always a bull market somewhere. let me go over what is going on. first, entirely possible that we will find out what is going on tomorrow, and today only the most clued in people knew what was happening and maybe it is fears of terrorism, and maybe the failure of a gigantic bank or maybe a chinese bank or

european bank or something inherently deflationary and that could spell trouble for all of the metals precious and otherwise and give you an expla explanation for the gold decline. this is the murky opaque scenario that keeps me on the sidelines from day one of a mass stock sell-off like today. when on any given day there is a motivated sell or sellers who start the precipitous decline and we have to presume that there is a good chance that someone knows something that we will all learn about tomorrow, and that something will be bad, and it will be a calamity that will move the market to the second day and maybe that could take your breath away and that is why i advice only buying small into the horrible weakness today, and typically my trust would be more aggressive, an instead, no. we don't know what was causing it, so you have to wait for the all-clear perhaps tomorrow. and the second possible reason that the possibility over the last few days it has crystallized in the investor's minds world wide that we are in the grips of a huge sell-off based on the sudden weakness of almost every single economy of

almost every single country in the world, including the u.s. and this theory says that china has down shifted and with the u.s. retail sales weak, and europe on the ropes with no resolutions, there is no safe place to hide, equities or the commodities because we have entered a super deflationary cycle and the companies will not hit the earnings cycle and making it a sucker bet, and the same as in housing where the stocks were hurt today are rolling over and you can't own anything. and in this rubric, the economy is directly related to a lack of demand and it is not stopping here. finally a third possibility, and one is distinctly probable and nonetheless allude you at home. and did they borrow too much money and foreclosed on to come up with the capital on the margin loans and i call it the mechanical trades and this is the trades sold mechanically and the managers with the funds who have borrowed too much money from the brokers and here the deal, you have bought a ton of

stocks and commodities with borrowed money, and they have put up more collateral and send in cash now. as a former fund manager, i have to tell you that most of the managers have a call like that don't have anymore cash, and they can't go to the investor and say, hey, why wire me millions of bucks because i borrowed too much. no investor is going to throw good after bad and some of the margin clerks sell out the positions of the near de well money managers, and they can do that, because you borrowed money from them. they take control of your stocks and commodity position and sell them in the open market regardless of the price that they are insensitive to price and when that happens the whole market goes down and goes down hard like today. look, i'm sure most of you believe in the first scenario if something is lurking and i don't blame you with the unfolding tragedy in boston. some of the people knew that the cypress calamity was going to happen, and if they sold it out, then most of us found out about cypress and the market dropped a

quick percent, and why not some bank reveal that there is a crack in the system that we didn't foresee which would mean that we would be down badly tomorrow. the theoreticians are loving the slowdown thesis that i outlined and they believe that everything involving growth is coming off of the china cliff. and they believe that these are political barriers and europe with the austerity proposal is exporting its own expression across the globe. and the fact that housing bubble is over, and nothing was dispelled today and friday, and that they are squeezed to higher payroll taxes. me? i come down squarely in the mechanical camp, because i have liquidated assets myself. i know the havoc that a margin clerk can wreak, because i have been there and been a part of it and perhaps because i am a recipient of a tough margin call

and because i know how the raise capital on the fly, and how hedge funds gone wild exacerbated the 2008 and 2009 sell-off with endless liquidations, and i have seen the pattern before and it is similar to all of the other times and it does not mean that it should be longer, but or when the margin clerks are done, but it should sold, because you have little basis of facts. what should you do? first, if you find out no mystery and world wide weakness, take the sell-off from face value and find out who benefits? the answer is companies like general mills, boxes filled with grains that are declining in price. and general mills benefits from the commodities decline all of the way around. so if you believe that there is a worldwide slip for commodities to decline, then gis. and this is the exaggerating the shortness in china, but go further and saying that the sudden and the mine numbing gold

is declining, then it is a big lever that is destroyed causing declines all over the place. and then you buy a higher yielder industrial or real estate yield, and we did that for the trust today. but here is the bottom line. we can always sound wise and i can come out here to sound wise spouting some thesis about what happened to gold and oil and stocks today and putting it all together, but the whole point of my exercise is to simply admit that we don't know the answer, at least not yet. ignorance is not decidedly bliss and you can't give advice on it, but nonetheless, i have a playbook on this occasion and now you know it. let's see what happens, and somehow i feel that we won't to have wait long. justin in new york. >> caller: hey, jim. how are you doing? how about the elan and the farmer takeover? >> well, a higher bid and i

would ring the register. don't stick around, because you got lucky and go home. chris in california, please, chris. >> caller: boo-yah, jim. >> boo-yah. >> caller: my call today is about the new agreement between ford and gm to create a new transition system that creates better gas mileage and i'm wondering if that might be the impetus to push forward past companies like tesla or others that don't create as many cars or employ as many people, and maybe i don't understand the fundamentals about that. >> well, it is a little theoretical, because westport has one, and tesla has a short squeeze going on, and i have been trying to get my arms around tesla, but i would not own ford or gm off of that and we care more about europe when it comes the ford and gm. michael? >> caller: hey, jim. >> hi, michael. >> caller: with the home builder confidence what is going on with the k.b. homes? >> well, there was a long analysis come out with stewart

and lenar being a very big home builder and nationwide presence and what he said was that the smaller builders are part of that and the smaller builders have been squeezed out, so don't read too much into it. i thought that the housing stocks were overly hit today and tomorrow we take a better look at them today. tough day, and we don't know what happened in the market, and we won't pretend that we did, but we have a playbook for when we don't know what is going on and i believe it will work just like it always has. more "mad money" coming up. >> and what sent shares of sprint soaring? what does it mean for the future of phones, cable and your connection? david faber is following the story and talking to cramer just ahead. later, perfect prescription? what got a boost from investors this morning after news of a positive drug study hit the street. and cramer will talk to the ceo next.

plus, crude behavior. oil on the decline in 2013. and while it makes for a refreshing sign at the gas station, some energy stocks are finding themselves in a slippery situation. could the slide continue? cramer sits down with the ceo of energy 21. all coming up on "mad money." don't miss a second of "mad money." follow @jim cramer on twitter and if you have a question, tweet cramer at #madtweets. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. ♪

♪ of course, our thoughts are with the victims and the families of the victims of today's horrible tragedy in boston. for this terrible incident we learned about an amazing deal. dishwork's takeover bid for sprint, a rival bid, and which rose on the news only closing up 84 cents or 13.5%. normally when a company takes a catchover bid i try to tell you the sell it, because the upside is there for the sell and we are

not arbitragers. and remember, that they were trying to get a section of the company, but they have a high pocket, so they can now come in and turn this from a cable television to cable powerhouse like verizon or at&t, and what does the clever ceo of dishnet have up his sleeve? and what are they going to do to buy from clearwater they that don't have for their own? the man for the job is david faber, my favorite man from "squawk on the street" and this is one tough story. that is why when i heard it i said, david, you are coming on the show tonight. thank you for coming on. >> my pleasure. >> we have to touch on the tragedy, because it is one of the things that takes your breath away, and it happens, and no one really knows anything. there is a vast scramble and you deal with a lot of the big funds, and there was just -- just chaos, and i think that paralysis among the people to figure out what to do with the money. >> no doubt, a tragedy like

this, and then the market. and clearly, we were having a poor market day, and then, you add on top of it this horrific incident in boston, and lot of the questions that we don't have the answers -- >> and that stopped. i don't know anyone who can think about money, because you just stop. that is pretty much what happened wane will sort through the terrible find out more about it. charlie urgen did this deal and that is not the type of deal, but the opening salvo of one of the more remarkable things that i have seen, david which is a rich man out of colorado taking on one of the most lucrative companies in the world. >> yes, it is fascinating, and it is early now in what is a new saga, i think, in a fight for sprint that will likely go on for a while. you have urgen trying to define -- >> and you know him well. >> yes, i know charlie well, and i respect him and i like him. you know, he's outlining a vision at this point, jim, of a world that he sees, and he believes that he needs at least.

now that has taken a form of him buying an enormous amount of spectrum, and spectrum he has not put to use, and he finally got the okay from the fcc late last year and he was sort of held up with the fcc for quite some time while a lot of the consolidation went on around him, and he was trying to figure out, what do i do, and what don't i do and now he is freed up and decided to go after sprint after a brief and not particularly productive attempt to going after clearwater. >> and now, david, the concept is eye open, because he is a gun slinger who is fuddy and on a tough day you don't want to point it out, but he says highways all over the place that are congested and this is the eighth lane less congested highway. he says a hybrid network and the continual theme that dish sprint will enable that you have the same power inside of the home as outside, and verizon may be and at&t, outside and cable inside. does it make sense?

>> well, you to make sense of spectrum and it is complicated of the different types of spectrum and what they have at clearwire and sprint and they marry well at least to urgen and his people, they marry quite well and able to produce, they will be able to produce a robust amount of bandwidth into the home. not new york city or urban area, they will say, hey, you can get broadband wirelessly from us, and buy it and throw out the cable company, but they are talking about a fixed wireless solution, meaning that you put up an antenna along with the dish antenna and have broadband coming to your house wirelessly and the triple play there. you have the broadband and the video and the wireless. >> that is a match made in heaven and one bill, and that is what people want. >> well, most of the country, you'd be looking at sprint and dish selling combined service, and maybe you get something off.

and so maybe they have 14 million dish subscribers and 40 million sprint subscribers and some overlap, but the synergy for the wireless and the video wireless there should be uptake. >> well, he spent time talking about the deal with the bank and the stock bases, but because sprint has all of the store fronts and you can sell the product. he makes it seem at&t and verizon and dish when the smoke clears. >> well, that is what you'd want, right? >> it is big. >> it is a duoply. >> and he does run that company lean, dish, and he is known as a lean operator, and they can't come with those synergys by softbank, but they can come back with more money and far less levered balance sheet.

this new company will have debt on it, and debt can prevent you from doing what you need to compete effectively, and that is what he needs. otherwise that bid is not as strong. >> and dan hasse has come on the show multiple times to talk about the build-up. and in the conference call, david, he says that he won't go into the bidding war here. >> well, we have to wait and see. look, the bid is never the last bid. softbank -- and first of all, we are not talking about a bid yet, but it is a proposal, and the board of sprint needs to deem it likely to lead to a superior bid and then you get there and then soft bank with their right to match and the back and forth and neither side wants it, but it is a very interesting fight that is really just beginning.

>> more on the question before we go become to what happened in boston, himself, where is he in his legacy? why now? he is not a young man anymore. >> he is not. he turned 60 recently, and worth about $14 billion, and one of the richest men in the country. he is not going to do anything else. he wants to build, and there is that question, if you were so aggressively looking to do this, what does it say about the belief in the core business? and when you ask him that, he will say, if i'm unsuccessful in this, i can be a seller and i have spectrum that at&t wants and they have had interest in dish in the past, jim. he does not mind unlike the other buddy in colorado, mr. malone, urgen does not mind paying taxes. >> and tomorrow morning is skittish market? >> i would think so. we still have a lot of questions that are unanswered. >> we will make the calls tonight and try to figure it out and put something together to what it will be like at 9:00 when i see you next on "squawk

on the street." >> look forward as always. >> david, you are the only guy to explain it to me,ed a it is pretty amazing what this man is trying to accomplish. thank you so much. "mad money" is back after the break. >> coming up, perfect prescription, and there was a boost of positive news hit the streets for a prescription. cramer will talk to the ceo next. [ coughs ] [ angry gibberish ] i took something for my sinuses, but i still have this cough. [ male announcer ] a lot of sinus products don't treat cough. they don't? [ male announcer ] nope, but alka seltzer plus severe sinus does it treats your worst sinus symptoms, plus that annoying cough. [ breathes deeply ] ♪ oh, what a relief it is [ angry gibberish ] we can afford to take an extra trip this year. first boston... then san francisco. hotwire checks the competitions' rates every day so they can guarantee their low prices. so our hotels were half price. ♪ h-o-t-w-i-r-e... ♪ hotwire.com

just seem to fade away...? now start vibrant, stay vibrant! new vidal sassoon pro series has an exclusive hydrablock system that helps fight fade out -- for up to 8 weeks. vidal sassoon pro series. salon genius. affordable for all. one way i can take care of my engine... is with one a day men's. a complete multivitamin with nutrients to help support heart health. compared to centrum men's, it has more vitamin d. to help support healthy blood pressure. [ engine revs ] [ male announcer ] one a day men's. has motionsense activated by your movement, the more you move the more it protects. ♪ do more. ♪ degree. it won't let you down.

on a day like today when a terrible tragedy hit the city of boston and the market dropped badly, it is hard to point to the positives but nonetheless, one strong performer and i'm talking about a aroca for you home gamers, and it jumped 49% since i recorded it last june. what is behind the run? accorda is a cap of $1 billion and unlike many biotech, it is profitable. the biggest one on the market is impura which helps people with multiple sclerosis with the ability to walk. the company has been studying it to see if it can help people with stroke victims and people with cerebral palsy, and the stock jumped, because we get positive data on the cerebral

palsy front, and strokes. and also with improvement for people with epilepsy. it is in development, and earlier stage projects. given how much this stock has run, i think that it is cautious, but however, there could be much upside ahead and don't take my word for it. let's talk to dr. ron cohen, who is the ceo of acorda therapeutics and find out what the new data means. dr. cohen, welcome back to "mad money." have a seat. okay. right into it, because people are used to phase two and then phase three and then approval. this stock jumped because of you, and i will quote you in the conference call, this morning the top bottom results from two proof of concept studies, and what is proof of concept versus phase two or three approval? >> well, it is a phase study, and some people would call it a phase 2a study.

what we are doing there is that we had data in animals with stroke models. >> like the last time here, you had lab rats. >> and we thought it was very encouraging, but nobody has translated it to see if it would work in humans, so we designed a small study to see if there was a signal that it would work in humans before investing in the millions of dollars that we need to in a large study. >> right. one of the things that i don't want to be overly optimistic here, but it seems like that the results could be so special that maybe this fda ought to end the trials and give this to people. >> well, as a physician myself, i would say that we need to do another study or maybe couple more studies to really nail down how to use this drug best, and make sure what we saw in the proof of concept is really reproducible in the next study and know enough to tell doctors how to use the drug best, and that it does work to help the patients.

>> in the conference call you talked a about six-smile study and the people walked a long time. >> in m.s., we did a short walk called a time 25-foot walk. >> timed 25 foot, and how long it takes to go from point a to b. >> and they have to go as fast as they can and for you and me, it is like us running a 100 meter dash and you are forcing them to exert themselves, and what is shown that apparently with small differences on the test, that translates to substantial improvements in the way that the patients can lead their lives. >> now the 7 million people with the stroke victims the same thing? could they get and is it having similar results and why? what is so -- stroke have to do with m.s.? >> well, right. in stroke, parts of the brain get damaged and in m.s., parts of the brain are damaged and the

source of the damage can be different, but the damage, itself, means that the brain is no longer able to communicate with the body and vice versa as well as usual, and this drug increases the ability of the nerves and the brain to communicate with the nerves in the body. we think that is how it works. >> well, that is reversing what we would have previously thought could not have been reversed. >> that is correct. >> that is remarkable. and when i mentioned it, it is a 6 minute walk data and the low dose and the high dose data in the trial is impressive and that is m.s. and no data from the stroke, but given the results, it is something to consider of a number of ways to go. are there people walking better or blind and we can't let them? >> are you talking about with the m.s. or the stroke? >> with stroke. >> in the proof of concept study, it is clear, very clear that some of the people with stroke were walking better with this drug. what we need to know is what, just more broadly how many people with stroke, and which types of stroke, and is it a reproducible result, because

just you have it one time in the study, you have to be double sure and do it again. >> the last time you were here and i was challenging whether it was going to be as good as physical therapy, and physical therapy cannot do what you are talking about, and kit not reverse. >> physical therapy like any exercise can help you the make the most of what you have left. >> right. >> this gives you more more than what you had left and it will improve. >> and for cerebral palsy, we don't know, because it was a smaller study? >> it could, but it is possible to improve. we saw some evidence of the treatment effect on certain measures on walking and hand strength in the adults with cerebral palsy, but it is a small study and we're not sure yet how strong the signal is. >> next step, if there are 7 million stroke victims, there has to be in all of the out-patient or the in-patient clinics, people should be trying and the studies have to be going on? >> there are no studies going on

except for the ones that we at acorda are sponsoring, and what we have to do is to analyze the studies and learn from the day the and design the next study and talk to the fda about it. >> somebody who knows about stroke victims and stroke, and i found this to be incredible, honestly. many people who know this did not think it is ssible, so it is really, and let's just hope. it is excite exciting. >> absolutely. >> dr. ron cohen, and it was a tough day out there, and if it had not been a tough day, i think that the stock would have been much more. acorda therapeutic. thank you, doc. >> thank you, jim. >> announcer: the "mad money" back to school tour is in session, and this time we are headed to the city of brotherl love. if you are a student at villanova university, and you are on campus on the 25th of april, and you want tickets go to madmoney.cnbc.com.

it is time, and it is time for thlightning round on cramer's "mad money," and taking the calls rapid fire. >> buy, buy, buy. >> sell, sell, sell. >> and i will tell you whether to buy, buy, buy or sell, sell, sell, and just so you know i don't know the questions ahead of time, and my staff prepares the questions on the fly, and when you hear this sound, it is time to move on to the next round. time to take some calls and

people who want to know about the stocks. doug in michigan. >> caller: hi, jim. this is doug, and i want to know what you think of the futures of the financial situation with kcap financial. >> i know kcap and yields the same as anly, and i think that you should switch out of kcap and go the anly. donna texas. >> caller: boo-yah, jim. can i offer a prayer for everyone in boston? >> oh, boy, yes. >> caller: okay. thank you. my stock is the ishares gold trust iau. >> well, this depends upon how much insurance you want for the rest of the portfolio, because a lot of the people were making bets in gold, but i preferred after what i am seeing with the etfs gold coins will hold the value more than the etf. if you don't have any gold, i say buy some. i say buy some.

sheree in michigan. >> caller: well, boo-yah, jim. >> agreed. >> caller: yes. the focus on the energy independence, what do you think about clr? >> i think that clr is good, and oil is coming down here, and we have seen these types of moves happen. and usually they are the ones who get hit the worst, and so if you bi-continental, buy it in stages and lower and goes down 5% to 10%, because people will say that the oil has peaked. out to california to tim. >> caller: this is tim in antioch, california, and my pick is diago. and hold or sell? >> well, when it was in the teens i liked it and then it sprang up to the 120s and i like it, but if you buy 100 shares, buy it and then wait the 1.15 and then to 1.10 and watch the yields, because it is a great stock. john? >> caller: boo-yah, jim.

>> how are you, john? >> caller: doing great. doing great. hey, i'm calling you about srcl, stericycle. >> that is a terrific company and it is starting to hit the valuation parameters and go up more, because it is non-economically sensitive, but one terrific company. i like the way that they smash the business, and that is medical. bill. >> caller: boo-yah, jim. >> boo-yah, bill. >> caller: my stock is pwe, and how is it doing? i hear that the stock is -- >> nah, it is not doing that well. you know, i mean, this is one of those that has to be interesting past considerations, and i will tell you that it is canadian and get the tax professional on this, because it is not the same as an american trust. over to a arthur in illinois. arthur? >> caller: professor cramer. i want to wish you a happy boo-yah and offer your golf and everything else from wren wright college in southern illinois. >> fantastic. thank you for calling.

>> caller: my question is usb, and i see it went from the long to neutral. i have been riding it up from the 15, and i have it in two or three different accounts, but i wondered what you thought, professor? >> well, people are upset, sir, because they feel that there is not enough growth in the mortgage business and the dominant mortgage player and the stock could run a little bit, but it is falling too much to abandon. i saw the downgrade and i said two years from now, that stock is going to be much higher and even two days from now it could be lower. rob in hawaii. please, rob. >> caller: hey, jim. >> hey, rob. >> caller: this is an apple-banana boo-yah. >> okay. >> caller: from the big island. >> oh. oh, mahalo. >> caller: and it is the best one of them all. >> i agree with that. >> caller: now, i have a stock called mpel. >> oh, you are playing that.

well, they are sensitive to the problems in china, and these companies are very good, but people feel that china is slowing down, and i don't want to commit anymore money to mpel, because i have the see the chinese stabilize before people should own the casino stocks. and that, ladies and gentlemen, is the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade. coming up, crude behavior. oil's been on the decline in 2013. and while it makes for a refreshing sign at the gas station, some energy stocks are finding themselves in a slippery situation. could the slide continue? cramer sits down with the ceo of energy xxi. [ phoebe ] stress sweat. it's different than ordinary sweat. it smells worse, and it can happen anytime -- to anyone! like when i ran to catch the train to work and a draft blew my skirt up and everybody here saw my unmentionables. yeah, and they aren't even cute. hello, laundry day. no...

[ female announcer ] stress sweat can happen to anyone, anytime -- and it smells worse than ordinary sweat. get 4x the protection against stress sweat. introducing new secret clinical strength stress response scent. ♪ are proven to be effective pain relievers. tylenol works by blocking pain signals to your brain. bayer advanced aspirin blocks pain at the site. try the power of bayer advanced aspirin.

the price of crude got pounded today down over $3 a barrel. and the oil and gas producers have been hammered this week. and now it is down almost 30% for the year, i'm referring to energy xxi, and i have to wonder how much lower it can go to bounce back even if price of crude stabilizes. it is the largest producer of the gulf of mexico shelf. gigantic with the assets of the gulf, they get 70% from the oil and 30% from the natural gas, and the company has had a rocky time lately, and the earnings miss was off of a 62% basis. and the guidance does not what we wanted either. however, energy xxi has a terrific long term track record

of making acquisitions where the oil reservoirs turn out to be better than originally mapped. they just did a big deal with apache, and we like them, with off shore exploration blocks in the gulf. why go down on a day like today? well, after the beating that energy xxi has done, the stock is trading eight times the earnings and you think of the oil and the gas that they have found in the past, it is a mistake to write them off now, so let's check in with the chairman and the ceo of the company, and learn more about the prospects. mr. shuler, welcome back the "mad money." good to see you. >> thank you. >> and we are trying to fathom it, because while the companies want more oil and too gassy, you have the oil. >> correct. >> you are finding more oil, but the market somehow just says that this is not the kind of oil situation that we embrace.

>> yep. >> what do you think? >> well, it is the production falling and quarter to quarter, it is big. and two, we were living with the cash flow, and we had a couple of strategic acquisitions that we did and we will outspend the cash flow for the first time in three years and that matters to the shareholders. >> and let's talk about how you did not take on excessive debt and go past the cash flow and now since the last time on, you have changed the coloration. >> well, yes, but we wanted to get the debt cap to lower than 40%, and we did that and we wanted to buy more acquisitions, and in southwest louisiana where we are already drilling a new well, and you will see it. but we will get back to it. >> and now you do have great hedges on? >> yes, great hedges.

>> yes. >> we have been putting the barrels down to put the floor on 106 and another 5,000 barrels a day on the lease there. >> and how about the apache -- and can you get something that could be bigger than what you already have and we all know that with technology you can get more out of the old fields, but this is brand new stuff. >> well, what we are doing is the wise seismics that we have been doing -- >> what? >> wise athemmic seismic, and we have done it on the shelf, and

we have joined with apache on some of the fields and you look for the big discoveries under salt. you think about this, if you want to hide a big oil under it is under salt. >> how deep? >> 15,000 to 20,000 are the primary targets. >> when you talk about, you are not a huge oil company, but this is the kind of thing that i would expect a huge oil company to do, and if we have things like happened with nick moran where, or davie jones to hit some dry holes how could you be put in a damaging position by this kind of thing? >> well, the wells that we are drilling are $30 million or $40 million, and we have 30%, and the one exxon is $30 million and done the first two, and the risk/reward is high and the reason they are there and while they are good sizes for us, 30 to 50 million barrel opportunities that is not going to move the needle for exxon or apache. >> well, they are possible on you guys, but they believe that deferred volumes from the aged infrastructure downtime and is the stuff that you bought not

state-of-the-art that you bought it from? >> well, we run a lot of smart things, and we knew what was going on in the pipelines and we had a game plan with exxon and what we could do immediately and down the road and what we could never maybe have to deal w and some of it has happened quicker than we thought, and mainly, because increased production and had to change out the gas compressors and talking about the gas compressors that were serial numbers 1 and 2 when they went in. >> we have a bizarre market where west texas is different from brent which is hovering $100, and your oil goes to be refined at the highest bidder. >> yes. >> and which is the real price, west texas or brent? >> brent is a much better indicator of the world price where people get at a loss and hung up in an american looking at american, but it is truly a world commodity, and we trade at brent plus, and we are making

above the barrel commodity. >> we had explosion up in boston today, and when you look at the geopolitical events that can impact oil, are you set up if something goes haywire? you can't predict a lot of the stuff, but you have enough hedges on that either way you would be okay? >> you are right. our long term bias is strong crude. so we protect with the catastrophic with put spreads like we talked about earlier and a lot of times three-way buying up the upside with a call to 140 so we have running room if one of the events occur that spike it overnight. >> and now back to the 30 or the 40 million. i mean, you -- these are project s that you have to borrow a lot of money to pull it off? >> no, we will generate $900 million to $1 billion. >> these are not issues.

>> no. >> and i'm trying to figure out how the stocks got down. >> yes. and -- >> and a ton of insider buying. >> we will get it back. >> that is the ceo of energy xxi, and the oil business is getting killed with the oil plunge. an unprecedented plunge in gold today led to the metal's worst sell-off in 30 years, and cramer is helping you to understand the motives behind the move and what it means for your money. did you know the core of our health is truly on the inside.

that's why i take new trubiotics. it's a daily probiotic that helps in two ways. one helps support digestive health, the other immune health. stay true to your health. new trubiotics. from the makers of one-a-day. our go sleeveless deodorant for five days. everybody got two t-shirts. which would they wear on day five? sleeveless. [ female announcer ] for visibly softer and smoother underarms, sleeveless ready in just five days. diarrhea, gas, bloating? yes! one phillips' colon health probiotic cap each day helps defend against these digestive issues...

with three strains of good bacteria. [ phillips' lady ] live the regular life. phillips'. how much did you pay for insurance?

how much is it worth? what would you pay for an alternative currency, especially living in europe or china or japan? how much is that worth? that is what goes through my head when i consider the price of gold which we all know is in total freefall right now. i liked gold when it was at $800 and it is worth buying if you don't own any, because you need something to offset the printing presses of the governments around the world, and you need the insurance of gold for a catastrophe in common stocks, but given the decline after the catastrophe in boston, it did not do the job. and precious metal has a place in the portfolio, because of the anti-paper characteristic, and if you don't own any, it is a good time to own it, as gold coins will hold up against the general etf, and we have seen that hammered. some people don't view it as a alternative to the dollar or the yen or the euro for that matter. they see gold as a way to quick

make money and trade it. but i don't want to trade it. the trade would be to trade it down to smaller, but more important when it comes the gold, there is serious irrationality for it. gold has been up for 12 years, straight, and during periods of inflation and deflation. and now it is just off of the october highs and going from the bull market to the bear market. gold has been a winner over time, and meaning that the precious metal has come down and borrowed money and poorly capitalized holders and now they have weak hands and they have to put up the cash, and they don't have it, and they want to hold on the positions, but they can't, and the trading is a function of desperate hedge fund managers to unable to be put up capital and managed by clerks who don't care one wit whether it is coming back soon or what, because they need to get it off of the books and get the house's money, that is all they care is

the margin clerks so that means that you cannot game when gold is going to finish going down. only the margin clerks know. there are things that you can know and things that you can't. you can manage the pluses and minus and the supply and the demand waning, and you can see the pluses and the minuses and plot it with interest rates an align it with fears of terrorism and still do it. today it broke down on 135 and that was the technical line in the sand, and just because some hedge fund you never heard of is broken in the line of the sand, and until that is fully margined out, it may not stabilize. my position is the same, you want a position in gold. i'm not changing that. the rate is still too important. and insurance against paper. however if gold is too large of a position in the portfolio, it is not functioning as a alternative, but a bet. that is a bet you should not make, because the level of where gold will bottom is out of our hands and in other words, where

it stops nobody knows except for the margin clerk. stay with cramer. ♪ ♪ [ female announcer ] come alive with the refreshing taste of lipton iced tea. feel the taste. are proven to be effective pain relievers. tylenol works by blocking pain signals to your brain. bayer advanced aspirin blocks pain at the site. try the power of bayer advanced aspirin. for him, who dares to get in the picture. for her, who dares to show her love to the world. for the daring ones, there's crest plus scope.

the only toothpaste that combines the freshness of scope with the whitening power of crest.

tough day trying to keep things in perspective and my heart goes out to everybody in boston. i'd like to say there is always a bull market somewhere, and i always try to find it just for you right here on "mad money." i'm jim cramer and i will see you tomorrow. >> announcer: the following is a paid advertisement for armando montelongo live events. if you are ready to change your life and take immediate control of your finances... if you're tired of hearing about the negativity in the news, and now realize that the government is not going to bail you out... if your gut instinct tells you that in an economy like this, there is a tremendous opportunity to take advantage of the growing foreclosure market and create total financial freedom for you and your family, you're about to meet a man that can change your future now. he is america's top real estate investing expert, he has been